Austria’s new tobacco market share grows to 7%

Austria’s new tobacco market share grows to 7%

According to Austrian media vienna, a press release issued by Japan Tobacco International Austria (JTI Austria) stated that the Austrian Ministry of Finance will receive approximately 2.1 billion euros from tobacco taxes in 2023, including 2.7 billion euros in value-added tax. Although tobacco prices rose by around 30 euro cents per pack last year, tax revenue remained stagnant at the level of the previous two years.

According to Ralf Wolfgang Lothert, member of JTI Austria, although tobacco prices are rising rapidly, tax revenue has remained at a stable level, which shows the need for reforms in the coming years. .

The market share of traditional tobacco is declining, but new tobacco products such as heated tobacco products are on the rise. The current market share is about 7% and is still rising. Tobacco-free alternatives such as nicotine pockets or e-cigarettes have a relatively small market share in Austria. Since these alternatives are less taxed than traditional tobacco, the tax revenue lost amounts to tens of millions of euros every year.

According to JTI, the traditional tobacco market has remained stable over the past year, with 12.6 billion sticks sold throughout the year, including some tobacco that does not pay taxes in Austria. According to Ross Hennessy, president of JTI Austria, this reflects a "modest volume decline" compared with 2022, with tobacco becoming more expensive for consumers. The average selling price increased from 5.502 euros to 5.77 euros.

However, tobacco shops have annual sales of 3.8 billion euros and average earnings have increased. In addition, the commercial profit margin increased by 8.2% to 191,000 euros.

Tobacco entering through smuggling accounted for 11.6% share in the past year. Since some tobacco is not taxed in Austria, the tax loss in 2023 will be approximately 285 million euros. For producers and merchants, losses amount to approximately 91 million euros.

Of the price of a pack of cigarettes in Austria, 76% is paid to the state as tobacco tax, and the remainder is divided among manufacturers, wholesalers and tobacconists. At an average price of 5.77 euros per pack, tobacco in Austria is more expensive than in neighboring Slovakia and Slovenia (4.60 euros each), Hungary (5.57 euros) and Italy (5.20 euros). Tobacco prices are higher in Germany (€7.00), Switzerland (€8.71) and the Czech Republic (€5.84).
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